ATLANTA, GA--(Marketwired - May 15, 2015) - Global Healthcare REIT, Inc. (
Q1 2015 Highlights
- Rental revenue increased 382% to $1.1 million versus the same year-ago quarter
- Funds from operations (FFO) was $275,000 or $0.01 per share (see, "Note Regarding Non-GAAP Financial Measures," below for additional information.)
- Paid quarterly cash dividend of $0.01 in Q1, marking the company's third quarterly dividend.
Q1 2015 Financial Summary
Rental revenue increased 382% to $1.1 million in the first quarter of 2015, as compared to $0.2 million in the same year-ago quarter. The increase in revenue was due to the contribution of facilities acquired in 2014, with the number of facilities totaling 11 as of March 31, 2015 versus five at March 31, 2014.
Rental revenue in the first quarter of 2015 was derived from 10 out of 11 facilities in the company's portfolio, with the Southern Hills independent living facility currently undergoing renovations that are scheduled for completion by the end of the year. The company expects to generate additional rental revenue of $165,000 per quarter beginning in the second quarter of 2015, with this due to stabilized rent proceeds from the Southern Hills skilled nursing facility and the Southern Hills assisted living facility.
Total expenses were $0.7 million in the first quarter of 2015, compared to $0.2 million in the same year-ago quarter. The increase in total expenses was due to increased depreciation expense due to the addition of properties to the company's portfolio in 2014, and related increased general and administrative expenses which included $154,000 in non-cash stock compensation. As the company continues its acquisition campaign for healthcare real estate, it anticipates revenue and cash flow to increase while holding general and administrative costs relatively flat and fixed costs at approximately $205,000 per quarter.
Interest expense was $0.7 million in the first quarter of 2015, as compared to $0.2 million in the same year-ago quarter. The increase in interest expense is due to increased debt outstanding.
Net loss to common shareholders was $0.3 million or $(0.01) per basic and diluted share in the first quarter of 2015 as compared to net income of $2.3 million or $0.12 per diluted share in the same year-ago period. The net loss to common shareholders in the quarter was primarily due to increased interest expense and to a lesser extent increased general and administrative expenses, and depreciation expense. Further, the company booked a bargain purchase gain of $3.0 million related to the purchase of the Southern Hills portfolio in the first quarter of 2014.
Cash and cash equivalents totaled $1.4 million as of March 31, 2015, as compared to $0.5 million as of December 31, 2014.
Funds from operations (FFO) was $275,000 or $0.01 per share in the first quarter of 2015 (see "Use of Non-GAAP Financial Information," below for the definition of FFO, a non-GAAP financial metric, as well as an important discussion about the use of this metric.) The increase in FFO was due to the contribution of facilities acquired in 2014. The company's dividend percentage of FFO was 79.76% in the first quarter of 2015.
Management Commentary
"Our strong quarter-over-quarter growth in rental revenue reflects our acquisition of six skilled nursing facilities since the year-ago quarter," said Global Healthcare REIT's president and CEO, Christopher Brogdon. "Our acquisition campaign for healthcare real estate is currently focused on acquiring four skilled nursing facilities in Texas and one skilled nursing facility in Georgia. These acquisitions would keep us progressing as planned toward our goal of doubling our portfolio to more than 20 facilities in 2015.
"As we grow our portfolio of senior care facilities, we anticipate revenue and cash flow to increase as we maintain corporate overhead relatively flat. We are currently refinancing several facilities in our portfolio, and with a HUD refinancing on two of our facilities, we expect to add 2.25 cents to our annual dividend capacity."
Quarterly Dividend
The company paid a regular quarterly cash dividend in April in the amount of $0.01 per common share for the first quarter of 2015.
"We recently paid our second consecutive quarterly dividend and expect our dividend to grow over time with the growth in our healthcare facilities portfolio," commented Brogdon.
Conference Call
Global Healthcare REIT will host a conference call next week to discuss the first quarter of 2015, followed by a question and answer period.
Date: Monday, May 18, 2015
Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific time)
Dial-In number: 1-888-389-5988
International: 1-719-325-2472
Conference ID: 8609800
Webcast: http://public.viavid.com/index.php?id=114670
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
A replay of the call will be available after 1:00 p.m. Eastern time on the same day through May 25, 2015.
Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 8609800
Summary of Property Portfolio
ALF = Assisted Living Facility SNF = Skilled Nursing Facility ILF= Independent Living Facility
| Property Name | Property Count | Facility Type | Beds/ Units |
Gross Annual Rent |
Membership Interest | Location | Date Acquired | ||
| Middle Georgia | 1 | SNF | 100 beds | $570,000 | 88% | Eastman, GA | 3-15-2013 | ||
| Warrenton | 1 | SNF | 110 beds | $334,448 | 95% | Warrenton, GA | 12-31-2013 | ||
| Southern Hills | 1 | SNF | 106 beds | $420,000 | 100% | Tulsa, OK | 2-7-2014 | ||
| ILF | 86 units | Under renovations | |||||||
| ALF | 32 beds | $240,000 | |||||||
| Goodwill | 1 | SNF | 152 beds | $734,400 | 88% | Macon, GA | 5-19-2014 | ||
| Edwards Redeemer | 1 | SNF | 106 beds | $540,000 | 100% | Oklahoma City, OK | 9-16-2014 | ||
| Golden Years Manor | 1 | SNF | 141 beds | $763,000 | 78% | Lonoke, AK | 9-16-2014 | ||
| Sparta | 1 | SNF | 71 beds | $237,372 | 83% | Sparta, GA | 9-16-2014 | ||
| Greene Point | 1 | SNF | 71 beds | $254,220 | 100% | Union Point, GA | 9-16-2014 | ||
| Meadowview | 1 | SNF | 90 beds | $361,000 | 100% | Seville, OH | 9-30-2014 | ||
| Total | 9 | 11 | 1,065 | $4.5 Million | |||||
About Global Healthcare REIT
As a real estate investment trust (REIT), Global Healthcare REIT acquires real estate properties primarily engaged in the healthcare industry, including skilled nursing homes, medical offices, hospitals and emergency care facilities. As a REIT, the company does not operate its own healthcare facilities, but leases its properties under long term operating leases. It currently owns interest in 11 facilities primarily across the Southeastern U.S. For further information, visit www.gbcsreit.com.
Forward-looking Statements
This press release may contain projection and other forward-looking statements. Any such statement reflects the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur and actual results could differ materially from those presented. A discussion of important factors that could cause actual results to differ from those presented is included in the Company's periodic reports filed with the Securities and Exchange Commission (at http://www.sec.gov).
Note Regarding Non-GAAP Financial Measures
Beginning with the reporting of results for the first quarter of 2015, the company began to report the measures of funds from operations (FFO) and FFO per share.
Funds from Operations (FFO), as defined by the National Association of Real Estate Investment Trusts (NAREIT), and FFO per share are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP.
FFO is defined by NAREIT as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, real estate depreciation and amortization and impairment charges, and adjustments for unconsolidated partnerships and joint ventures. The Company computes FFO in accordance with NAREIT's definition.
| GLOBAL HEALTHCARE REIT, INC. | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2015 | 2014 | |||||||||||
| ASSETS | ||||||||||||
| Property and Equipment, net | $ | 40,113,683 | $ | 40,259,357 | ||||||||
| Cash and Cash Equivalents | 1,431,587 | 533,597 | ||||||||||
| Advances to Related Parties | 433,211 | 353,211 | ||||||||||
| Restricted Cash | 598,187 | 904,157 | ||||||||||
| Notes Receivable - Related Parties, net of discount | 840,215 | 1,186,822 | ||||||||||
| Prepaid Expenses, Deferred Loan Costs, and Other | 1,030,249 | 1,490,634 | ||||||||||
| Goodwill | 1,750,454 | 1,750,454 | ||||||||||
| Total Assets | $ | 46,197,586 | $ | 46,478,232 | ||||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Liabilities | ||||||||||||
| Debt, net | 37,477,387 | $ | 37,610,874 | |||||||||
| Accounts Payable and Accrued Liabilities | 525,287 | 268,942 | ||||||||||
| Lease Security Deposit | 231,667 | 176,667 | ||||||||||
| Total Liabilities | 38,234,341 | 38,056,483 |
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| Commitments and Contingencies | ||||||||||||
| Equity | ||||||||||||
| Stockholders' Equity | ||||||||||||
| Preferred Stock: | ||||||||||||
| Series A - No Dividends, $2.00 Stated Value, Non-Voting; 2,000,000 Shares Authorized, 200,500 Shares Issued and Outstanding | 401,000 | 401,000 | ||||||||||
| Series D - 8% Cumulative, Convertible, $1.00 Stated Value, Non-Voting; 1,000,000 Shares Authorized, 375,000 Shares Issued and Outstanding | ||||||||||||
| 375,000 | 375,000 | |||||||||||
| Common Stock - $0.05 Par Value; 50,000,000 Shares Authorized, 21,856,716 and 21,640,051 Shares Issued and Outstanding at March 31, 2015 and December 31, 2014, respectively | 1,092,836 | 1,082,003 | ||||||||||
| Additional Paid-In Capital | 8,683,852 | 8,540,520 | ||||||||||
| Retained Earnings (Accumulated Deficit) | (298,705 | ) | 212,573 | |||||||||
| Total Global Healthcare REIT, Inc. Stockholders' Equity | 10,253,983 | 10,611,096 | ||||||||||
| Noncontrolling Interests | (2,290,738 | ) | (2,189,347 |
) | ||||||||
| Total Equity | 7,963,245 | 8,421,749 | ||||||||||
| Total Liabilities and Equity | $ | 46,197,586 | $ | 46,478,232 | ||||||||
| GLOBAL HEALTHCARE REIT, INC. | |||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2015 | 2014 | ||||||||||
| Revenue | |||||||||||
| Rental Revenue | $ | 1,123,314 | $ | 233,279 | |||||||
| Expenses | |||||||||||
| General and Administrative | 444,366 | 118,262 | |||||||||
| Acquisition Costs | - | 180,455 | |||||||||
| Loss on Sale of Property and Equipment | - | 381,395 | |||||||||
| Depreciation | 304,711 | 71,081 | |||||||||
| Total Expenses | 749,077 | 751,193 | |||||||||
| Income (Loss) from Operations | 374,237 | (517,914 | ) | ||||||||
| Other (Income) Expense | |||||||||||
| Bargain Purchase Gain | - | (3,000,000 | ) | ||||||||
| Interest Income | (39,072 | ) | (22,062 | ) | |||||||
| Interest Expense | 737,472 | 212,477 | |||||||||
| Total Other (Income) Expense | 698,400 | (2,809,585 | ) | ||||||||
| Equity in Income (Loss) from Unconsolidated Partnership | 53,688 | - | |||||||||
| Net Income (Loss) | (270,475 | ) | 2,291,671 | ||||||||
| Net (Income) Loss Attributable to Noncontrolling Interests | (14,986 | ) | 5,902 | ||||||||
| Net Income (Loss) Attributable to Global Healthcare REIT, Inc. | (285,461 | ) | 2,297,573 | ||||||||
| Series D Preferred Dividends | (7,500 | ) | (15,781 | ) | |||||||
| Net Income (Loss) Attributable to Common Stockholders | (292,961 | ) | $ | 2,281,792 | |||||||
| Per Share Data: | |||||||||||
| Net Income (Loss) per Share Attributable to Common Stockholders - | |||||||||||
| Basic | $ | (0.01 | ) | $ | 0.13 | ||||||
| Diluted | $ | (0.01 | ) | $ | 0.12 | ||||||
| Weighted Average Common Shares Outstanding: | |||||||||||
| Basic | 21,804,843 | 17,003,171 | |||||||||
| Diluted | 21,804,843 | 19,828,856 | |||||||||
Contact Information:
Company Contact:
Ryan Scates, Executive Vice President
Global Healthcare REIT, Inc.
Tel 404-781-2852
Investor Relations Contact:
Ron Both
Liolios Group, Inc.
Tel 949-574-3860